Mary Jo White and getting tough on Wall Street: Editorial

Mary Jo White is introduced by President Obama yesterday.Kevin Deatch/Pool

Nearly all of the major firms on Wall Street have been forced to pay fines for sleazy behavior, like tricking investors into buying rotten securities the banks themselves were betting against.

But the fines aren’t big enough to deter the bad behavior at behemoths such as Goldman Sachs or Citigroup. The U.S. Securities and Exchange Commission has been soft-hearted in many of these cases, imposing fines that one federal judge described as “pocket change” for the big firms. It has also routinely allowed firms to refuse any admission of guilt as part of secret settlements.

Contrast that cozy treatment with the jail terms that are routinely handed out to kids on street corners who are making small change selling bags of pot or vials of cocaine. Our prisons are full of them. But it’s tough to find even a handful of the creeps on Wall Street whose crimes were far worse.

Enter Mary Jo White, the former U.S. attorney in Manhattan, a lioness best known for her prosecution of mafia boss John Gotti. President Obama nominated her yesterday to lead the SEC.

Will she get tough? Will she impose bigger fines, require open settlements and admissions of wrongdoing, and work closely with prosecutors to send the worst miscreants to jail?

Some worry she’s gone soft, having worked for Wall Street firms since leaving her job as federal prosecutor. But our guess is that bartenders on Wall Street are pouring a few extra martinis this week to help calm the nerves of the masters of the universe at the big firms. Our hope is that they have good reason to be nervous.